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Strong growth outlook across healthcare verticals:

APHS's growth outlook remains strong, driven by hospital capacity expansion till FY29, diagnostics growth supported by ~17% business growth and pharmacy expansion through retail growth and 20–30% targeted digital order growth. Improving occupancy, higher clinical complexity, cross-selling, better unit economics and online-offline synergies are expected to drive sustained revenue growth, operating leverage and margin expansion, with HealthCo targeting higher singledigit EBITDA margin over 3–4 years

Result is in line with estimate; strong YoY growth on all fronts

* Revenue came in at INR 76.1 Bn (in line with CIE est.), up 23% YoY and 9.9% QoQ, driven by increase in volume and better case mix.

* ARPP grew by 7.8% and achieved INR 1,86,880 in Q2FY27

* EBITDA came in at INR 11.9 Bn (in line with CIE est.), up 28.8% YoY and 10.6% QoQ. EBITDA margin came in at 15.6% (in line with CIE est.).

* Adj PAT came at in INR 6.3 Bn (vs. CIE est. of INR 6.4 Bn), significantly up 30% YoY and 6.6% QoQ, with a PAT margin of 8.3%.

Hospital business: Capacity expansion and rising clinical complexity to drive sustained growth:

APHS is well-positioned to capture India's growing demand for advanced healthcare, supported by its expanding network and strong clinical capabilities. It plans to operationalise ~480 beds over the next 12–18 months, in line with the phased ramp-up plan. Growth will be driven by higher occupancy, increasing share of high-acuity CONGO-R specialties and international patients. Improving utilisation and new hospital break-even are expected to support operating leverage and margin expansion.

Pharmacy business: Omnichannel synergies to unlock margin expansion:

APHS's pharmacy business offers strong growth potential, supported by ~28% retail growth and a targeted 20–30% increase in digital daily orders. Following cash break-even, improving unit economics, better product mix, privatelabel penetration and online-offline synergies will drive operating leverage, with management targeting higher single-digit EBITDA margins over 3–4 years

Diagnostics business: Strong cross-selling to drive sustainable growth:

APHS's diagnostics business is expected to benefit from cross-selling across its extensive pharmacy network and integrated healthcare platform. With ~17% growth, deeper integration with hospitals, pharmacies and digital channels will drive customer acquisition, higher test volumes and repeat transactions. Improving network utilisation is expected to support sustained growth and profitability.

View and valuation:

We anticipate Revenue/EBITDA/APAT to expand at a CAGR of 17.9%/21.3%/27.9% over FY26–29E. Valuing the stock on an avg. of FY28–29E SoTP, we maintain our target price of INR 9,600 and an ‘ADD’ rating on the stock. We value Hospitals at 22x EV/EBITDA, AHLL at 10x EV/EBITDA and HealthCo at 2x EV/Revenue (from 3x) due to recent regulatory changes in the pharmacy business (refer Exhibit 2).

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SEBI Registration no.: INZ 000160131